Expert: Joe Hylas - 6/4/2009

Question
Purchase most coins from mint but know about standings of the 3 top grading companies, PCGS, NGC and ICG.  It bothers me to see the difference in the number of highly graded coins these companies experience.  Grading must be subjective to a point and I'm beginning to believe that many 70 coins are downgraded to 69 by, say, PCGS, to keep it's reputation as top grader.  With the difference in price between 69 and 70 coins, I'd hate to think this happens.  Do these graders have better eyesight or are they truly so perfect and critical they really see the difference?  I understand that three graders must view the coin.  If only one of the three sees the coin as a 89, that's the value it gets.  Am I correct in the understanding of the grading procedure?  If so, it seems that many 69 grading coins are believed to be a 70 by the majority of employees, yet a 69 it is.

Answer
Hi Steve,
Grading is definitely subjective.  I have been grading coins for 40+ years and even now, I can't see why a perfectly good 69 is not a 70.  I don't know anyone who can but I guess they know what to look for.
Most of the 70 coins you see are very modern with high mintages.  Is there really a difference or is it a marketing ploy?
There are some collectors out there "who want the finest" and pay for it but does the grading service carry that much weight?
In the case of all 3 of the services you mentioned, I have seen obviously overgraded coins.  I don't know about ICG but PCGS and NGC have a buyback guarantee.  If you send them a coin that they agree was overgraded, they will buy it to take it off the market.  So they do try to police themselves.
I try to dissuade collectors from buying certified modern coins.  There are just too many of them out there.  Instead I tell them to keep the coins in the orig mint packaging because in the long run, coins in orig packaing appreciate better and have more demand down the road.  Simply look at orig mint proof and mint sets from the 40's and 50's as an example.
I know grading services can be frustrating but it is something we have to deal with.

Regards
Joe Hylas
Omega Precious Metals
www.AllCoins.US